Bursa is also proud to be a green city, with many parks and a local citizens’ movement dedicated to protecting its green belt. So it was a very logical step – though by no means an easy one – for the city to introduce light rail, one of the cleanest and fastest modes of urban transport.

Bringing light rail to Bursa has been a massive project. Engineer Eren Kural, Bursa’s Head of Rail, says that consulting the community, planning the 40 km route, redesigning surrounding streets, changing the old pipes and cables along the way and extending the electronic ticket (which existed in Bursa long before London got its Oyster card) meant a lot of work and needed a lot of financing. This was obtained from commercial banks, a state bank and multilateral banks, including the EBRD (a €70 million loan plus technical assistance) and the EIB (€100 million).

The EBRD loan funded the branch of the light rail network that connects Bursa’s university, with its famous faculty of medicine and big hospital, to the city centre. At the busy, spacious University station, students in street fashions and older folk in traditional clothes get off the train and then safely walk to the campus via a subway. It’s a big change from the days when commuters had to run or limp from one crumpled bus to another to make their lecture or doctor’s appointment. “I have received so many emails and texts saying thank you for the new trains!” says Eren Kural.

Light rail is also firmly connected to the city’s dreams for the future.

“For Istanbul football teams, Bursa is a major nightmare,” says Cavit Cali, the head of the municipality’s finances and a big fan of the celebrated Bursaspor football team. In a few years’ time, Bursa wants to bid to receive major international tournaments. The city is already building a new football stadium – close to a new light rail station.

With two friends, also engineers, he started a workshop to make those bobbins in Kösekoy, İzmit. Soon, their products were demanded by household goods makers and finally the car industry. Today, Kalibre Boru is a leading producer of precision steel tubes for Turkey’s automotive industry, employing over 350 qualified workers and engineers.

The history of Kalibre Boru is the industrial history of Turkey’s latest decades and an illustration of how to turn every challenge into an opportunity to become more competitive. The company was founded in a crisis, to help others stay afloat. Another big event launched their product in Europe. When the EU-Turkey Customs Union came into effect in 1995, the Turkish market was suddenly opened to a glut of international competitors. Turkey was forced to improve the quality of its goods. It was hard for many, and not all Turkish companies survived. But at Kalibre, the quality was already high, so after some adjustment the company found it was now profitable to export their precision tubes.

During the latest global financial crisis, at the helm of the company was Anil Ünan, CEO and the founder’s son. “We steadily increased exports of our tubes for years, but then the crisis came. We knew that the automotive industry would slow down. So we shifted part of our production to the aftermarket; so when people stopped buying new cars but started repairing their existing ones instead, our sales kept steady. Our tubes are in everything – shafts, shock absorbers, airbags, seats, you name it. So now we’re diversified and protected from future shocks.”

Kalibre’s engineers work constantly on product improvements. “We tell our suppliers that it is possible to make the car lighter, which is important for carbon emissions, or use a new material with higher strength. Our customers will then incorporate these ideas into their own designs”, says the founder, Şerif Ünan.

EBRD financing came in 2011 and funded the launch of a new, smaller diameter high precision tube. “Until then, that particular tube was mainly imported,” says Anıl Ünan. “But today we supply over half of the Turkish market which is one of the largest markets in Europe. All new Renaults, Fiats, Fords and many other cars produced in Turkey have at least one tubular component made by Kalibre Boru”.

Kalibre Boru is a tier 2 supplier, which means they supply to companies that supply the automotive industry. Because their tubes are so specialised, they are now needed by automotive industries in other countries. Yet another crisis – this time the Eurozone crisis – made the global carmakers shift their production to new markets. “We see another chance to expand”, says Anıl Ünan.

Until a few years ago Mersin had no choice but to dump its wastewater into the sea. Today, it is already treating 80 per cent of its own wastewater in a newly built facility and has recently started construction of an EBRD-financed wastewater treatment plant which will take care of the remaining 20 per cent.

The head of the municipal water company, Mustafa Kamil Ülgen, says, “Wastewater treatment is needed for many reasons – but the most obvious one is to clean up the sea.” He adds that people, including himself, have already started going for a swim after the completion of the first plant, financed by the EIB. Once the EBRD-financed facility is operational, the city can start building a beach.

Apart from the €20 million loan, the EBRD has provided a range of technical assistance to Mersin sponsored by the Slovak and Austrian governments. Most of it is aimed at engineering and construction. Private companies will also be involved. A private firm will operate the new wastewater treatment plant, while the city is already talking to local private cement producers who might use the resulting sludge.

Due to new administrative divisions the Mersin water and wastewater company will soon take over several new districts along the coast, where sewage plants will be built as well.

Today, Mersin wants to be known not only for the industrial zones but as a sports centre. This year, the Mediterranean Games – which attracts athletes from throughout the region – are coming to the city, and new sports facilities and roads have been built specially for the event. The city hopes that athletes and spectators from other countries will enjoy the city and that soon the yachts on the Mersin marina will feature more international flags.

Forty years ago, a young blacksmith called Fazli Turker used to dream of building a vehicle capable of negotiating the steep, rocky terrain around his home village, Hisarlar.
One day, as he was thinking about his dream machine, a farmer came to ask for his help: a doctor had told the farmer that he would die if he continued to work in an open tractor in all weathers.

So Turker made a cabin – the first for a Turkish-built tractor. Then he printed a leaflet promising that his cabins would “protect you from the heat and cold” and founded a company named after his village in central Anatolia. Today, Hisarlar produces tractor cabins with the most sophisticated modern safety features for all Turkish manufacturers, as well as making lots of agricultural machinery.

Shared passion

We do not speak the same language, but I knew immediately where Turker was coming from. I had the same love of tractors as a boy. We were born the same year (I am not telling you which) and were both second sons in big families (he had five brothers and sisters, I had seven).

Turker’s love of tractors grew into Hisarlar and the EBRD recently became a shareholder in the company by providing a joint investment with the Darby Converging Europe Fund III.* On a recent visit to a Hisarlar production plant, I was invited to sit in a very comfortable tractor cabin – something I hadn’t done for decades.

To this day, Turker does not have any special engineering education. His first encounter with mechanics and electricity was at the age of 10, when a travelling cinema came to his village.

R&D pioneer

But when he and his brothers founded the company, training and education and then research and development became central to their philosophy. They employ over 820 staff, out of whom 150 are certified welders and about 40 are engineers.

Several years ago, the company pioneered its first behind-tractor cotton harvester with John Deere. In 2011 they launched a research and development centre in Eskisehir – the first and only such centre for agricultural machinery in the country – and it soon won official endorsement from the government.

Today, the company’s CEO is Turker’s son, Zafer Turker. Recognising that his family’s company had come a long way from just protecting farmers against the heat and cold, he went to Japan to learn from Toyota and came back a fan of Japanese standards of operational excellence. As a result, Hisarlar rewards workers for ideas which save time and cut costs and boards that record progress and savings are everywhere at the company.

Dream machine

The company believes that Turkish agriculture will grow and so will their market. Currently, Hisarlar makes smaller machines for Turkish farmers, as standard-sized equipment is simply not economical. A government reform programme aims to consolidate land plots and create more economically-viable farms. When that happens, Hisarlar will be ready to produce bigger machines.

At the moment, however, they are looking to other countries to expand, particularly Russia. I hope the EBRD will be able to help companies like Hisarlar make their first vital contacts in Russia and our other countries of operations.

The EBRD has invested in the growth of Hisarlar’s agricultural machinery, cabin and metal components business.

But the founder did not forget the vehicle he was imagining on the day that farmer came to ask for his help. “Turkar”, Fazli Turker’s big dream, already exists and can be driven; it is the first Turkish multi-purpose mini-truck which can go almost anywhere.

*The investment in Hisarlar was executed through the EBRD’s Local Enterprise Facility (LEF). LEF is a €400 million proprietary vehicle for investments in SMEs in the Balkans, Turkey and the SEMED region. It benefits from donor support from Italy, the EBRD Shareholder Special Fund and the SEMED Multi-Donor Account. It provides debt, equity and quasi-equity.

IMON International was a project of the National Association of Women in Business and started business with 10 employees and three offices in Khujand, Dushanbe and Shakhrituz in 1999. Six years later, the institution was registered as a separate organisation and received its first US$ 1 million loan from the EBRD to expand to the country’s more rural areas.

Financing local enterprises and agribusinesses

The goal is to provide access to high-quality and transparent financial services. That is why IMON is opening more and more new branches in rural areas and is developing exclusive products for agribusinesses and women in business.

Twelve innovative products support Tajik businesses and people, including: “Bahoriston” which provides finance to improve housing conditions (housing repairs); “Investment” which supports the manufacturing sector and purchases of new equipment; and “Start-up business” which helps women to launch their own businesses.

“This is an innovative product,” says the CEO of IMON International, Sanavbar Sharipova of the latter product. “If a woman has some previous knowledge and skills to start her business we can help her improve her management skills, which reduces the risk for us, and give her a loan. We already have successful projects on milk processing, clothing and embroidering,” she adds.

Mrs Sharipova is the first and only woman from Tajikistan who has received an EBRD Women in Business Award.

Local currency lending’s importance for Tajikistan

In January 2013, the EBRD approved a new 29 million Tajik somoni loan (approximately US$ 6 million) to IMON International. This will allow the organisation to expand its activities in a market currently under-served by financial institutions, where demand for financing outstrips supply.

This means additional branches, which will provide support to even more clients and longer-term financing to micro and small businesses. As the loan is in Tajik somoni, IMON and its clients will also avoid foreign currency exchange risks.

This is possible thanks to the EBRD Early Transition Countries (ETC) local currency programme, supported by the Early Transition Fund, the Swiss State Secretariat for Economic Affairs (SECO), the United States and the EBRD Shareholder Special Fund.

With the EBRD’s support, IMON has become one of the largest financial institutions in Tajikistan and opened 13 new branches since 2005. Also, the number of employees has increased from 35 to 1071, about 40 per cent of whom are women.

In two generations, Bozkurt’s family farm in the Tarsus district of Mersin in the far south expanded about seventy times. His father, Mustafa Bozkurt, inherited 15 hectares of land. That is still the only land the family owns outright; but through leasing Bozkurt’s father increased the size of the farm to 250 hectares. Bozkurt went to the university to study agriculture. Returning with knowledge of the latest farming technology, he introduced new crops and new farming techniques and increased the total size of the farm to 1000 hectares.

Bozkurt started investing in his own equipment and recently got his first EBRD financing through a credit line, the Turkey Agribusiness Financing Facility.

“For successful farmers like us, short-term credit was available from one or two other banks before the EBRD credit lines were introduced at Yapi Kredi bank,” Bozkurt says. “The difference is better terms and, importantly for us, the time it takes to approve a loan. I needed a 200 thousand Turkish lira (€85,000) loan quickly, to buy a tractor and a supply of seeds. Under this scheme, it was approved in three days, while before it used to be 7-10 days. It may not sound much to an outsider, but for us it really saves money: big companies sometimes run short-term special offers for seed and fertilisers, and this three-day approval really gives me a chance to benefit from that.”

Bozkurt starts talking about how the government’s reforms work for farmers like him. It is thanks to the land consolidation reform, which encouraged bigger, more economically sized farms, that he was able to increase his lease to 1,000 hectares. (The farm is still run by only five people: Bozkurt, his parents and two hired hands). This size makes it viable to own, rather than lease, agricultural machinery. A brand new John Deere tractor taking the place of pride in his yard and some modern but already well-used equipment from Hisarlar in the shed are proof that the farm is doing well.

Hisarlar and other Turkish makers produce smaller-sized machinery to suit the average local farm consisting of small, fragmented leased land plots. But if farmers like Bozkurt had more consolidated plots, it would enable them to use standard-sized equipment which can save up to a third of fuel. Companies like Hisarlar are ready to start producing it.

The next step for Bozkurt is animal husbandry. He is ready to start breeding livestock for meat, feeding the cows his own corn. Bozkurt is one of the first few farmers who are beginning to see the logical step of adding value by transforming grain into beef. He shares a tip: “Selling a whole cow at the festival of Kurban Bayrami can get you quite a bit of cash!”

Bozkurt’s father, Mustafa, is smiling and sipping tea while Bozkurt tells us about his plans. “I see progress,” he tells me. “My son is taking things in the right direction. But then, of course, he still has my advisory services.”

*YapiKredi bank could approve Ali’s loan in just three days thanks to the innovative client assessment model for agricultural loans (“Captool”) developed by the EBRD with the assistance of donor funds from the US and EU. This model – which analyses many factors from local microclimate to type of crops, yields, prices for produce and expenses – allows the bank’s loan officer in a local branch to establish the creditworthiness of a farmer quickly, without involving agricultural specialists.

Captool is part of an agricultural financing framework of US$ 200 million created to get larger private-sector banks more involved in financing grass roots agriculture. Until recently, agricultural finance was mainly provided by state-owned Ziraat bank. Now, other banks – including Deniz Bank – have entered this market and have shown they can make agriculture lending a profitable business. YapiKredi bank and others are now following suit – which is good for farmers and food security.

With the help of donor funding from the EU, the EBRD’s Small Business Support (SBS) team recently completed a successful 41-month programme working with SMEs in Kosovo.  The core of the SBS programme involved working with 115 different enterprises, helping them access professional expertise from international and local consultants so they can develop and grow, stimulating employment and private sector development in the country.  These projects helped the enterprises improve their operations in areas as diverse as marketing, accounting, energy efficiency, accounting and quality standards.

One business that worked with SBS under this programme was TrePharm, a pharmaceutical company that was looking to improve their quality standards in line with EU requirements and design a new approach to their product development, marketing and financial reporting.  As well as working with an international expert from the pharmaceutical industry, TrePharm also took part in an SBS-sponsored trip to Italy, where they could see state-of-the-art technology in action.  The project was considered so successful that the results were shared with 100 pharmacists from across Kosovo in a seminar accredited by the Kosovo Ministry of Health.

The programme also had a social dimension, targeting women in business, minorities, young entrepreneurs and people with disabilities and rural development.  One key component was Women in Business workshops, focusing on women entrepreneurs.  SBS held two training sessions for women business owners and managers in the agro-processing and textile industries, two of the key growth sectors for women in Kosovo, including providing information on accessing finance – something which continues to be particularly challenging for Kosovar businesswomen.

A further initiative had SBS team up with NESsT, an organisation working to promote social enterprise development in Kosovo.  Together, SBS and NESsT held two skill-building workshops for Kosovan social enterprises and private businesses to help them plan ahead, get away from ad hoc project planning and increase the impact of their programmes.  Enhancing social enterprises in turn generates more jobs for vulnerable groups, such as women and people with disabilities.

For companies like TrePharm, the success of this programme is already clear.  The enterprises that took part in the programme report an average turnover increase of 31 per cent and an increase in the number of employees of 12 per cent.  As TrePharm CEO Mergim Prishtina put it, “SBS is showing us how to fish more effectively.”

Back in the day, the brothers worked on commissions for friends and customers reached by word of mouth from a basic production facility based in their hometown Kragujevac. “We sensed the furniture market potential,” recalls Vladimir. “We started out small and in just a few years the demand was bigger than our production capacity.”

Their experimental activity soon became a serious business which progressively evolved from selling through established retailers to opening their own stores in 2001. Today, thanks in part to the EBRD, Forma Ideale furnishes almost every Serbian home.

An innovative financing facility

The growth of successful private companies like Forma Ideale can have a significant impact on the Serbian economy. Increasing their productivity and exports could double per capita income by 2020 according to the World Bank. A much needed boost, considering current high unemployment rates and stagnant household incomes.

To support this growth, the EBRD has established the Local Enterprise Facility (LEF), a versatile financing instrument, which assists successful entrepreneurs in expanding or restructuring their small or medium business through equity-driven investments (of which the Bank owns minority shares).

The Lazarevićs’ company, for example, benefited from a €5 million investment. “We looked for local financing but we were unable to find the right solution due to the uncertainty of the financial crisis.” says Vladimir. That’s when they engaged with the EBRD. “The LEF investment allowed us to weather the storm in 2010 and maintain the company’s position of regional market leader in flat pack furniture.”

“Through LEF the Bank was able to provide financing tailored to the company’s needs allowing it to strengthen the capital base, repay commercial debts and consolidate the business.” says Aleksandar Nikcevic, Principal Banker for the Manufacturing and Services team in Belgrade responsible for the project. “In a wake of the crisis the Bank took an active role alongside the owners in successfully reshaping the company’s business model to a fast changing market environment.”

Extra value through free technical assistance

Launched in 2006, with support from Italy, LEF also offers companies technical assistance to facilitate the investments and help improve their performance. For instance, LEF worked together with the EBRD Small Business Support team to help Forma Ideale introduce better corporate governance standards and strengthen its financial management raising its profile among potential investors.

Today LEF is active in the Balkans, Turkey and, with the support of the southern and eastern Mediterranean (SEMED) Multi-Donor Account and the EBRD Shareholder Special Fund, also in Egypt, Jordan, Morocco and Tunisia.

An award-winning, inclusive company

At Forma Ideale, production lines are in full swing. Tables, sofas and beds manufactured here are sent to dozens of stores in Serbia and hundreds of wholesale buyers in the Balkans, the EU, Russia and Kazakhstan. Unsurprisingly, over 36 million copies of the furniture catalogue are printed in 11 different languages each year.

The company also employs some 1,100 people. This year, Forma Ideale received an award from the Balkan Community Initiatives Fund for its corporate philanthropy, in particular for its history of inclusive employment practices and support to vulnerable groups, including persons with disabilities, members of the Roma population, refugees, and internally displaced persons.

“We are really a good team of people,” confirms Radmila Stojanović in one of the Belgrade stores. She’s been working in the sales department for over seven years and continues to value the diversity of a job that allows her to meet new people every day.

The Lazarevićs brothers are proud of Forma Ideale’s achievements, and the EBRD is pleased to have found such a valuable partner to help shape the ideal private sector in Serbia.

SBS recently completed a special 31-month programme, funded by the European Union, that worked with 121 Macedonian SMEs, as well as almost 100 local consultants.  SBS works both with individual enterprises – helping them access business advisory services either through international experts or qualified local consultants, and with the local consultancy market itself, developing a sustainable and effective market of advisory services for SMEs to draw on long term.  The projects cover issues as diverse as marketing, energy efficiency, accounting and quality standards, with each project tailored to the specific needs of the enterprise.  For FYR Macedonia, a country advancing towards EU accession faster than some of its Balkan neighbours, compliance with EU regulations for export is also becoming increasingly vital and many of the projects dealt with these considerations.

Dim Komerc, a preserved fruit and vegetables producer from Valandovo in the south-east of the country, was one of the enterprises that benefited from the programme.  Dim Komerc exports 99% of its products, sending them mainly to other countries in the Balkans, Russia, Sweden, Canada and Austria.   But when they began targeting markets in Germany and Sweden, they realised they would need to clearly comply with strict food safety standards.  Dim Komerc worked with SBS on a consultancy project to introduce the International Food Standard (IFS) into their operations.  The consultant trained Dim Komerc’s employees in the IFS principles, introducing new working standards into every stage of the supply chain and production process.

The project helped Dim Komerc to prepare for an IFS audit they have scheduled for mid-2013. The company has invested over €100,000 in constructing new sterile food preparation and storage rooms – an improvement that has attracted the attention of the German retailer Metro.  Metro’s initial orders alone have increased Dim Komerc’s turnover by 62% and they are currently planning their expansion into further new markets.

To mark the successful completion of this EU funded programme, SBS held an event to present the results of the programmes, achievements, case studies and best practices, and several of the beneficiary companies spoke on their experiences.   The event was attended by 190 guests, and speakers included HE Ambassador Aivo Orav, Head of the EU Delegation to FYR Macedonia, Valon Saraqini, Minister of the Economy of FYR Macedonia and Charlotte Ruhe, SBS Director.

The answer lies some 5,000 miles away on the North American Atlantic coast. These are the native waters of the comb jellyfish, a species that ranges from less than 1cm to 1.5m in size. Its local environment keeps the numbers in check, but this wasn’t the case when it was transported via ships’ ballast water into the Black Sea ecosystem.

Risk factor: ballast water and unwanted stowaways

Ballast water keeps ships stable when travelling empty or with little cargo. When the ship is loading goods elsewhere, the water is discharged along with larvae, microbes or organisms that can cause havoc in the new environment if the vessel doesn’t manage its ballast water properly.

“Harmful organisms carried by ships’ ballast water are seen as one of the major threats to the world’s oceans. As they endanger biodiversity, they are not only an ecological threat, but can also have a disastrous effect on the economy and public health,” explains Dr Jose Matheickal from the International Maritime Organization (IMO).

It’s a huge global problem, as more than 90 per cent of the world’s trade is handled by the shipping industry – and it warrants urgent attention. At some stage, experts estimated the Black Sea to harbour more than one billion tonnes of the comb jellyfish – the equivalent of 10 times the weight of all fish caught globally each year. Even worse, the creature moved its way into ships’ ballast tanks (via the ship traffic of the canal) into the Caspian Sea.

Other examples can be found around the globe: a water flea from the Black and Caspian Seas made its way to the Baltic states. It reproduces quickly and forms large populations that clog fishing nets and trawls – with obvious economic effects on fisheries. Even some cholera strains are suspected to have travelled through ballast water, causing thousands of deaths.

A common European Bank for Reconstruction and Development (EBRD)/IMO Marine Biosafety Initiative

The problem led the two biggest London-based international organisations, the EBRD and IMO, to join forces two years ago to initiate the Marine Biosafety Initiative aimed at preserving the biological diversity of the underwater world in the Bank’s region.

A first phase of workshops in Russia and Ukraine brought together representatives from shipping companies, port administrations and other organisations to learn more about ballast water, invasive species and the obligations under the IMO International Convention for the Control and Management of Ballast Water and Sediments.

The convention has been attracting more and more interest and countries around the world have started to ratify it – such as the most recent joiner, Denmark. So far, 36 countries representing 29.07 per cent of the world’s fleet have ratified it, which means that it is expected to come into force soon. (This will happen once the signatory countries represent 35 per cent of the gross tonnage of the world’s merchant shipping.)

At that point, the IMO convention will become part of the international legal framework and will place significant responsibility on states as well as private sector companies involved in maritime trading. And non-compliance is not an option, as this will entail the risk of severe penal actions.

Training the private sector in Turkey

“The second phase of our workshops therefore focuses on private sector firms dealing with maritime traffic,” says Stanislav Suprunenko, Environmental Specialist at the EBRD. “These companies have to know the rules and how to manage ballast water if they want to stay competitive and ahead of the game, as international requirements are about to become binding.”

For port operators this means that ships might avoid certain harbours, which are considered “high risk” and exporters of harmful species. As receivers and suppliers of ballast water, they also have to ensure certain control functions, develop biological baselines and provide contingency measures if ships are not able to meet the requirements. Also, ship-builders and ship owners have to look into innovative solutions as they will shortly need to install treatment systems on-board many existing ships and most new ones.

Two three-day workshops, jointly organised by IMO and the EBRD, explained the implications in more detail to 52 Turkish participants from the private sector in late 2012. The workshops outlined how operators can deal with ballast water, their obligations under the IMO convention and provided a forum for discussing potential areas of concern.

Next stop: Georgia and the southern and eastern Mediterranean (SEMED)

“Such a constructive dialogue already proved highly useful at previous workshops,” explains Dr Matheickal. In Russia, for example, it helped to bring private entrepreneurs and public sector officials together. This contributed significantly to the ratification of the IMO convention by Russia, which is now allowing time for the private sector to prepare for its entry into force. It also provided the seed for some private companies to look into innovative technological solutions to treat ballast water.

“This is yet another reason why the EBRD is actively promoting the project and contacting other international financial institutions in order to involve them in supporting the initiative,” Suprunenko says.

In addition, more countries in the Bank’s region will be able to benefit from the initiative in the months ahead. With continued support from the multi-donor EBRD Special Shareholder Fund, the EBRD and IMO are preparing another training workshop in Georgia in 2013.

And this is not all: a further extension into SEMED is being considered for later this year, Suprunenko adds. “Egypt, Jordan, Morocco and Tunisia all have important shipping activities. Ensuring that ballast water is managed properly could play a vital role for the region’s sustainable maritime transport and, more generally, its future economic development.”